Regulatory Affairs
OIG Questions Legality of Multi-Specialty ASCs
An Office of the Inspector General advisory opinion concludes that multi-specialty ASCs may be illegal under the federal Anti-Kickback statute, and the OIG says it could potentially impose administrative sanctions on such facilities.

Opinion 03-5 addresses a proposed ASC joint venture between a hospital and a multi-specialty physician group comprised of seven surgeons and 46 primary care physicians; the ownership plan calls for 51 percent physician ownership and 49 percent hospital ownership. The problem? Some of the physician owners would not perform surgery at the ASC, so the OIG worries that the ASC would be a channel for physician investors to profit from referrals without having to do the work.

The OIG's analysis could spell trouble for joint-venture multi-specialty ASCs with this type of ownership structure. Moreover, OIG appears to be saying that other multi-specialty groups that own ASCs could be violating federal law. How can your group partnership protect itself?

Healthcare lawyer Joseph Sowell III, JD, of Nashville, Tenn.-based Waller Lansden Dortch & Davis, PLLC, says that, optimally, you should design your ownership structure within the OIG's "safe harbor" for group practices.

The ASC safe harbor requires that each physician owner of the center be a physician who receives one-third of his practice income from performing on-site procedures from Medicare's ASC procedure list. This "one-third-income test" theoretically ensures that physician owners of ASCs use them as an extension of their practices. The group-practice safe harbor permits primary care physicians and surgeons who are part of the same group to make referrals to each other for services, including ambulatory surgery.

Even if a joint venture does not meet the safe harbor, that does not mean the arrangement is unlawful; it does mean the arrangement could be subject to additional scrutiny by the OIG. To protect yourself:

• Exclude outside physician investors. The group-practice safe harbor is inapplicable if a primary care physician who is a group member refers patients to a surgeon who is not.
• Divide profits properly. The income from the ASC should pay group overhead or be distributed among the owners of the group in proportion to their ownership.

- Stephanie Wasek

MAC Cataract Reimbursement
Medicare Carrier Reverses Proposal
Noridian, the primary Medicare carrier for 11 states in the western U.S., has withdrawn a proposed policy that would have denied facilities reimbursement for monitored anesthesia care during cataract/ lens surgery (CPT 00412). The company had said it need not approve MAC services for most cases because an ophthalmologist could provide routine anesthesia. Noridian would have reimbursed for MAC in cataract surgery only if the patient had certain conditions, such as heart disease, hypertension, morbid obesity or a metabolic disorder.